Colin Huang, founder of parent company Temu, now the richest person in China

The former Google engineer eventually started Pinduoduo, an e-commerce platform known for selling cheap products with massive promotions, in 2015. He quickly climbed the ranks of the world’s richest people, with his net worth peaking at 71 .5 billion in early 2021.

Like many so-called Covid billionaires, his fortune collapsed as quickly as it was made, dropping 87% in about a year. Huang’s decline was particularly severe because the slowdown in the global pandemic coincided with China’s sudden crackdown on the country’s private sector.

Then something surprising happened: PDD Holdings Inc. Huang’s returned. Not as big as before, but steady, with its expansion outside of China under the Temu brand helping to counter a persistently weak domestic economy.

As a result, Huang, now 44, became the richest person in China, according to the Bloomberg Billionaires Index. With a fortune of $48.6 billion, he replaces Zhong Shanshan, the country’s bottled water king, who has held the top spot since April 2021.

Huang’s remarkable rise has been fueled by China’s changing shopping habits after the nation’s housing crisis turned into a prolonged slowdown. He is also the first tech tycoon to top the wealth list in more than three years after the government’s crackdown on private enterprise captured rivals such as Jack Ma’s Alibaba Group Holding Ltd. a punishing work schedule for its own employees.

“Ma and Jeff Bezos were corporate leaders in their moments, but times have changed and Huang is finding great success with a different, less visible approach,” said Brock Silvers, managing director at private equity firm Kaiyuan Capital.

PDD representatives did not respond to requests for comment.

The miracle of mathematics

Unlike Ma, the English teacher turned Alibaba founder, Huang represents a new generation of Chinese tech entrepreneurs who started their careers with global opportunities.

At 12, his prodigious talent for mathematics earned him a place at Hangzhou Language School, where he was classmates with children from China’s political and social elite. After graduating with a computer science degree from Zhejiang University, he left China in 2002 to pursue a master’s degree at the University of Wisconsin.

Two years after graduation, he moved back to help create Google China. He founded his first company in 2007, then sold it in 2010 to start a new one that helped companies market on websites like Taobao or Alibaba’s JD.com. When an ear infection forced him to retire in 2013, he conceived the idea for Pinduoduo.

PDD “is not about letting people in Shanghai feel like they are living a Parisian life, but making sure people in Anhui have kitchen paper and fresh fruit,” Huang said in the 2018 interview with Caijing magazine. “The goal is not to be cheap, but to make users feel like they’re getting a good deal.”

Temu time

Huang has largely stayed out of the limelight after stepping down as PDD’s chief executive in 2020 and leaving the board as chairman in 2021 as Beijing began cracking down on China’s tech giants. (He said he pursues personal interests in food and life sciences research, according to a shareholder letter.)

During that time, PDD – and his net worth – began to decline.

But Temu, PDD’s offering outside of China, strengthened the company’s top line and underpinned its comeback. It soared to the top of the US app store when it launched in September 2022, targeting inflation-weary Americans with cheap, unbranded products shipped directly from China. PDD reported revenue of about 248 billion yuan ($35 billion) last year, a 90 percent increase from 2022.

“In this economic environment, obviously people are looking for great value for their money, people are looking for low prices,” said Neil Saunders, retail analyst at GlobalData Retail. “So this is a time to shine for value retailers like Temu.”

All this, together with China abandoning its Covid-Zero policy in December 2022, caused a rise in the PDD rating. In November, the company overtook Alibaba for the first time to become China’s second-largest internet firm, and the two rivals have been at odds ever since.

Hours of punishment

However, the skyrocketing growth has attracted attention at home and abroad. Even after an investigation into working conditions following the death of an employee in 2021, PDD continues to require employees to work from 11:00 a.m. to 11:00 p.m., six days a week, plus overtime. It’s a variation on the industry’s “996” culture from which companies such as ByteDance Ltd. and Alibaba have distanced themselves following regulatory scrutiny from Beijing.

Temu’s ultra-cheap offerings have also led to growing frustration among merchants and third-party sellers who feel the e-commerce giant is increasingly squeezing them for revenue. Things came to a head in a series of public rallies this summer, when in one case hundreds of small suppliers chanted slogans outside an outpost of Temu’s office in Guangzhou to protest what they called unfair penalties that the company imposes.

Elsewhere, US small businesses have also noticed Temu’s rapid growth. The company currently takes advantage of a trade loophole that allows duty-free shipments of up to $800 to the US by sending small packages from its warehouse in China to individual Americans. Lobbyists are pushing for the threshold to be lowered to $10.

Still, PDD engaged in aggressive promotional campaigns, including spending millions on a 30-second Super Bowl ad for Temu. He also has eye-catching banners on his Temu website, including, among others: “Shop Like a Billionaire”.

“Right now, Temu is all about growth,” Saunders said. “Get people to the site, get them shopping. Then, if they become more addicted, maybe then they start to be more tolerant if we raise the prices a little bit. So I think for Temu it is in an era of land grabbing.”

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